CFO Jurgens Myburgh: Mediclinic Southern Africa's revenue continues to be impacted by Covid-19.
Mediclinic has reported an improvement in operational performance between April and May 2020 following the impact of Covid-19 lockdown in its Switzerland and United Arab Emirates divisions. It has also announced continued improvement during June, demonstrating resilience during the pandemic and its aftermath.
As lockdown measures are relaxed, the gradual reintroduction of elective procedures and outpatient activities has led to improved operating performance. “In June, the operating performances at our Switzerland division, Hirslanden, and our United Arab Emirates division, Mediclinic Middle East, which represents more than two thirds of the group’s revenue, were ahead of the prior year,” says Mediclinic CFO Jurgens Myburgh.
However, he adds that Southern Africa is yet to reach the initial peak of Covid-19 and, consequently, Mediclinic Southern Africa’s revenue continued to be impacted by the crisis and in June 2020 was down approximately 12 percent on the prior year.
“The severity, duration and full impact of the Covid-19 pandemic and its economic aftermath on all businesses, including Mediclinic, continues to be uncertain,” Jurgens says.
He explains that there remains a risk to elective procedures and outpatient activity from a continuation or reintroduction of lockdown and other measures in response to the pandemic, like the availability of staff and a disruption in the supply chain.
“We remain focused on fulfilling our vital role as a leading provider of essential healthcare services during this crisis,” he adds. “To this end, the group remains agile in its approach, optimising its response to overcome challenges and create opportunities while seeking to maintain its strong financial position and liquidity.”
In response to Covid-19 Mediclinic has:
- Strengthened its supply chain to secure additional PPE, medical and surgical consumables and equipment.
- Increased care capacity by acquiring additional ventilators, expanding critical care capacity, sourcing more critical care staff and establishing alternative interim facilities.
- Reconfigured hospitals to care for Covid-19 and non-Covid-19 patients
- Increased testing capacity by establishing additional testing stations and laboratory testing facilities.
- Launched new telemedicine, pharmacy home delivery, drive-through pharmacies, 24/7 client call centres and crisis control, and online risk assessment tools services.
To ensure the company’s strong financial position and liquidity, Mediclinic has taken what it believes are proactive and appropriate measures, including:
- Postponing or reducing all non-urgent and non-committed capital programmes
- Postponing or reducing all non-essential general administrative costs and those relating to specific projects
- Monitoring operating cash flow generation and liquidity to reassess decisions
- Further optimising working capital management
- Deferring loan amortisation payments as appropriate
- Suspending dividends and executive directors' annual salary increases and short-term incentives